Revenue Recognition Blog

Internal Controls with The New Revenue Recognition Standard

[fa icon="calendar'] Jun 2, 2017 3:03:21 PM / by Ali Almohashi, MSA, CMA posted in Internal Controls

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company Golden Bear Golf Inc. is named after legendary golfer Jack Nicklaus. Its fully owned subsidiary is Paragon, which builds golf courses. Paragon executives Boyd and Curbello artificially increased revenue. They conducted fraudulent schemes to manipulate revenue by accelerating project progress, inflating expected revenue, creating fictitious contracts, and not recording unexpected project losses. Boyd and Curbello even started accepting a loss contract where the cost of the contract was higher than the price charged. Then, they did not record losses associated with these contracts. This scheme overstated Paragon revenue by more than $25 million.

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